NOTE:
THIS NEWS STORY is designed to help the public understand developments in the WTO. While every effort has been made to ensure the contents are accurate, it does not prejudice member governments’ positions.

The group is calling for prices that are guaranteed to producers under these programmes — for resource-poor, low-income farmers and for food security — to be categorized as “Green Box” support and therefore allowed without any limits.

After those meetings, the chairperson, who is New Zealand’s ambassador, began exploratory consultations at a more political level to start “matching … our new knowledge about the existing policies with different elements of the proposal, raising therefore both technical and political questions,” he said.

He added: “It is also clear we are not yet close to agreement — in fact, the substantive discussion of the proposal is only beginning.” (Audio below)

These include: a proposal from the G–20 group of developing countries on tariff quota administration (the way quotas for lower-duty volumes are allocated among importers); another from the G–20 (not yet submitted) on eliminating export subsidies and disciplining other aspects of export competition so they do not contain subsidies; and from the G–10 on tightening disciplines on export restrictions.

Members agreed at the Hong Kong Ministerial conference in 2005 that export subsidies should be eliminated in 2013 as part of a Doha Round package. The G–20 and Cairns Group said that date has arrived even though the Doha Round has not been completed. Some countries said the entire export competition package cannot be separated from the rest of the agriculture negotiations and other subjects in the Doha Round, and is therefore not a candidate for early agreement in Bali.

Some countries continued to have reservations about the tariff-quota administration proposal, which they see as part of a balance with other market access provisions in the agriculture negotiations, and asked whether special treatment for developing countries would leave major food importers as the main target of the proposal.

Others said tariff-quota administration is about fulfilling market access commitments from the Uruguay Round (which produced the present agreement) — for example quotas that are under-used even when domestic prices are higher than world prices — and should not be confused with new market access being negotiated under the Doha Round.

The G–33 proposal

The stockholding proposal was submitted by the G–33 group in November 2012 and discussed in the meetings in January and February. It is part of the group’s more general call for special treatment for developing countries to support their poor farmers. Indonesia is the G–33’s coordinator.

The group envisages amending the Agriculture Agreement to loosen disciplines on domestic support, notably on price support linked to public stockholding and food aid, in order to enhance food security and support poor farmers. It draws on the text in Annex B of the December 2008 draft “modalities”, the main agriculture draft currently on the table.

Views

All members support the need for stockholding to improve food security. They differ over the means of achieving this.

The G–33 proposal would give developing countries a relatively free hand to use price support, the group arguing that present WTO disciplines will become a constraint on their ability to implement these programmes.

Others are concerned that without disciplines, some ways of implementing the programmes could distort markets — inflating the prices farmers receive and the quantities they produce, and ultimately depressing world prices.

They also want to avoid changing the way WTO agricultural trade rules are constructed. This, they say, would happen if market-distorting policies such as price support were moved into the Green Box — which has no limits and is supposed to distort trade by no more than a minimal amount — instead of the Amber Box, which has limits and reduction commitments.

They therefore want to discuss ways of disciplining market intervention to avoid distortion and ensuring the programmes are really targeted at poor farmers and consumers.

Some said they are unable to support the G-33 proposal as it stands. But speakers on both sides said each other’s concerns are legitimate and deserve to be heard.

Nine technical consultations

All delegations who spoke said the nine technical consultations, chaired by Jonas Skei of Norway, had been useful. Mr Skei reported to Ambassador Adank, who reported in turn to the meeting.

Six members presented their programmes — Pakistan, India, China, Indonesia, Brazil and the Philippines — leading off detailed discussions on how the programmes work.

During the four weeks, 28 members also replied a questionnaire circulated by the Secretariat with eight sets of follow up questions from members, some general, some for 15 members.

On the proposal itself, the G–33 said the freedom to use these programmes (their “policy space”) had been reduce by higher prices, requiring higher “administered” prices to be used in the programmes, Ambassador Adank reported. As a result, the Amber Box limits have become much more constraining now than when the present agreement was negotiated in the 1986–94 Uruguay Round negotiations. (Under present agreed rules, support and commitments to reduce support are measured partly by comparing administered prices against fixed reference prices from the late 1980s.)

The group feels stockholding programmes are the best way to ensure food security for its populations, and that administered prices are needed so governments can compete with the private sector to buy the produce, to stimulate production and ensure food is available, to ensure some farmers are paid enough, and to shield farmers from the effects of rapidly rising and falling prices. The group believes this then benefits consumers, he reported.

Among the concerns raised about the proposal were: lack of constraints to prevent the programmes from distorting markets; whether present limitations such storage capacity can justify having no explicit rules; the possibility that better targeted or market-oriented programmes might allow countries to implement the programmes within their Amber Box limits; whether “policy space” is only a temporary concern as programmes evolve; and the implications of the G–33 proposal for WTO agriculture in general and Green Box disciplines in particular.

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Audio

Use these links to download the audio files or to listen to what he said in the meeting:

The chair’s statements:

Explanations

This was an informal agriculture negotiations meeting of the full membership, officially an “Informal Open-Ended Special Session” of the Agriculture Committee.

Modalities: The way or method of doing something — in this case, how to cut tariffs, enlarge quotas and reduce subsidies and support, along with flexibilities to deal with various sensitivities. The core methods are formulas for cutting tariffs and supports, with a number ways of achieving the flexibilities or tightening disciplines. Once the modalities have been agreed, countries can apply the formulas to tariffs on thousands of products and to various support programmes.